Key Points:

Growing concern about the merit of biofuels is threatening to derail a Government push to get the new fuels flowing out of petrol pumps in little more than three months.

The biofuel bill, now before a select committee, proposes to make oil companies begin selling a small but progressively higher amount of biofuels each year from July 1.

But while the bill passed its first reading comfortably, widespread political support is no longer as assured because of worries that the legislation does not deal strongly enough with questions about whether biofuels will come from sustainable sources.

Global debate about biofuels has shifted in recent months and in Britain - where the fuels are set to begin flowing on April 1 - a dispute is raging about whether biofuels will do more harm than good by leading to rainforest destruction and food shortages.

National MP Nick Smith yesterday said his party would not back the biofuel bill unless the issue was sorted out and it was made clear that the fuels coming into New Zealand would be from sustainable sources.

A delay to the bill's start date might be needed, he said.

"There just isn't the time before July 1 to draft credible criteria, and then for oil companies to be able to access fuel to meet that criteria," Dr Smith told the Herald.

"National will not support the bill unless we are satisfied that the biofuels are going to make a positive contribution to the environment."

Some of Parliament's smaller parties are also understood to be concerned but are holding back on final decisions about the legislation until it is reported back from a select committee in just over two weeks.

The Greens moved several months ago to get a reference to sustainability put into the biofuel bill.

The clause that was added contains a regulation-making power allowing the Cabinet to set environmental standards for the biofuels which are sold.

But with the launch date only three months away no clear standard is yet available.

Dr Smith said officials had advised the select committee examining the bill that the earliest the provision could come into effect was next year, and they did not expect to introduce regulations until 2011.

It was likely some of the biofuels coming into the country until then would be from unsustainable sources, Dr Smith said.

Climate Change Minister David Parker has acknowledged some submitters to the select committee want the bill to go further in its sustainability criteria.

Mr Parker has asked officials to look into including more criteria in the bill itself, and to also consider whether there should be mandatory reporting for biofuel providers of the source of their fuels.

The biofuel push is expected to increase the price of petrol for drivers, and that too is concerning some political parties.

Oil giant BP submitted to the select committee that the price of fuel would rise by between 7c and 15c a litre as a result of the added cost of biofuels.

New Zealand First deputy leader Peter Brown admitted yesterday his party was "a little bit nervous" about whether the biofuel bill was going to do what it was meant to at a reasonable cost.

"It's fair to say people have raised concerns with us," Mr Brown said.

"We've said we'll take those on board and make up our minds when the bill comes back."

Mr Brown said the concerns raised with his party ranged from the increased cost of petrol to whether the biofuels would influence the price of food.


Biofuels (made from alternative products such as beef tallow) are set to be introduced in small amounts from July 1 as part of the Government's climate change push.

But there is growing global concern that the production of some biofuels is pushing up food prices and bringing about rainforest destruction.

The legislation contains a clause about sustainability, but there is doubt that an environmental standard will be ready in time for the July 1 launch date.

Political support for the biofuel legislation is potentially shaky unless the sustainability issue is sorted out quickly.